Here's What Tesla And The Other Silicon Valley 'Disruptors' Don't Get About Politics

You might be surprised to see me launch this column by defending
a conservative like Gov. Chris Christie, but when it comes to his
administration’s
beef with Tesla Motors, I think he might be getting a bad
rap.

There’s no question Tesla is innovative. Their luxury
electric cars and the hardware they sell to other companies are
changing the way we drive, but they don’t want to stop there.
Tesla also wants to revamp the way cars are sold in this country
by selling directly to consumers rather than through dealers.
This has led to battles in several states where existing
regulations require giving franchise dealerships a piece of the
action.

New Jersey is the most recent front in the Tesla tussle.
Even though there’s not much chance of me swapping out my '05
Ford Escape hybrid for one of the company’s Model X cars anytime
soon, I’ve been watching the fight closely. Tesla blamed the ban
on direct sales that was passed in Jersey this month on a
“backroom” deal between Christie’s administration and the auto
lobby. Coverage of this fight in the tech press seems to have
toed the Tesla line that these regulations are a roadblock to
innovation designed to protect entrenched interests and reward
the car dealers’ lobby for the cash they’ve thrown around over
the years. I think that’s missing the point and I’ve been
surprised that anyone is all that shocked by the opposition
Tesla’s seen to their plans.

Now let me stipulate to the fact that, during my time
in Congress, like many other politicians, I received donations
from car dealers. I should also note you could fill a book with
what I don't know about New Jersey and I certainly don't know who
promised what to whom in this case. Of course, I’ve also got
plenty of problems with Christie and his policies. Still, I think
the simplistic shouts of "let the market decide!" that we’re
hearing from Tesla and their supporters minimizes the legitimacy
of the regulations that have been passed over the years.

Why would you want to have laws that require a car be
purchased through a local dealer? Perhaps to protect a
purchaser's rights to easily enforce the warranty. To ensure the
state's ability to enforce the reams of unique state legal
requirements that govern automobile sales, service and even
disposal maybe. Or, it might just be a run-of-the-mill instinct
for local rather than federal regulations to govern what, for
many Americans, is the biggest purchase of their lives. You may
not agree with these conclusions, but these are longstanding laws
and there was a robust back-and-forth about them well before
Tesla drove onto the scene.

Another issue with Tesla’s push to establish direct sales
is that there isn't an element of the current structure that
regulators and lawmakers didn't contemplate when these
restrictions were implemented. Some innovators have a legitimate
beef that the laws governing their industries are outdated, for
example, the broadband companies stuck with a legal regime
written way before the internet was born. Tesla’s situation is
different. Tesla's CEO Elon Musk may argue that his product is so
revolutionary it warrants special treatment, but it's still just
a car.

There’s nothing new about this debate. You can't swing a
dead cat in Washington or any of the 50 state capitals without
hitting a lobbyist pitching the idea some regulation is
overreaching, unnecessary, or stifling of competition. With
Silicon Valley’s libertarian streak, tech companies have been
especially likely to butt heads with existing rules.

Along with Tesla, companies like Uber and Airbnb, are
trying to do more than upset the established entities in their
markets. They’re all building businesses on an even tougher bet —
that they can get rule-makers and legislators to throw out the
laws that those same people wrote. In this respect, the Tesla
fight is noteworthy only in that it's a cool car.

Reasonable people may think regulations that get in the way
of tech companies are all just bad laws. In Tesla’s case, some
might consider bans on direct auto sales to be part of a
protectionist regime set up by a powerful lobby — neighborhood
car dealers — and unchallenged by a lazy industry that didn't
want to antagonize its sales force. Still, dismissing all
existing regulations out of hand without recognizing them as the
product of reasoning and careful consideration isn’t the
answer.

Tesla and these other tech disruptors might want to put
more of their energy into finding ways to fit their innovations
into existing regulations. In situations where that’s not
possible, why don’t these founders and tech executives focus on
getting wider public support or convincing lawmakers their causes
are just? Instead, they seem to show up expecting the world to be
wowed by their shiny new companies and losing it when people
don’t get out of the way. Gnashing of teeth via press release
doesn't make the case where it counts. If you want to be in the
business of selling great cars, there may be more productive ways
to spend your time than bitching about the laws that the majority
have passed and reaffirmed from the time of the Model T.